Page 79 - MSM_AIR2021

SUSTAINABILITY JOURNEY HOW WE ARE GOVERNED FINANCIAL STATEMENTS ADDITIONAL INFORMATION 77

OVERVIEW

The rising trend of raw sugar price and natural gas has made for a

challenging year for MSM. The NY11* fluctuated between 14.0 to
20.5 US cents per pound amid concerns of supply shortages from
major raw sugar producing countries such as Brazil and Thailand.
The forecast is of a continued uptrend towards 21.0 US cents per

pound at least until the second quarter of 2022. In the effort to
mitigate the risks of increasing costs of MSM’s major raw materials
going forward, the Raw Sugar Procurement Department executed
its strategic hedging programme on both the NY11 raw sugar

as well as Brent Crude Oil.

2022 PRIORITIES

Secure our raw sugar for the year at Explore various pricing and hedging
the lowest possible price on average mechanisms to better manage
to help the Group in minimising the volatility and reduce price risk
production cost exposures

Note:
* The NY11 contract is the world benchmark contract for raw sugar trading and is available on The Intercontinental
Exchange (ICE). The size of each contract is 112,000 pounds. The biggest producer and exporter of sugar in the
world is Brazil (23% of total production and 49% of total exports). A significant amount of sugar is also produced
in India, Europe, China, Thailand and the United States.